SJC strikes down 'millionaire's tax' ballot question

The Massachusetts Supreme Judicial Court has blocked from the ballot a constitutional amendment that would have raised the tax rate on income over $1 million, dealing a fatal blow to the three-year-old initiative to make the state's tax system more progressive.

The ruling by the state's highest court ensures that Massachusetts' flat income tax, which is now 5.1 percent, will remain in place without an additional surcharge on the wealthiest tax filers. The ruling will deny the state an estimated $1.9 billion in additional annual revenue, which the state would have raised if the ballot question passed in November.

In a decision written by Justice Frank Gaziano, the SJC found that the initiative contains two subjects that are not "related or mutually dependent," which is not allowed under state law. That is because the question both sets the tax rate and also earmarks money for education and transportation.

Gaziano wrote in a 38-page opinion on behalf of a majority of the court that the decision about whether to have a graduated income tax and the decision to earmark money for education and transportation are not mutually dependent, since each policy could exist independently. On the question of whether they are related, Gaziano wrote, "We are unable to discern a common purpose or unified public policy that the voters fairly could vote up or down as a whole."

"The two subjects of the earmarked funding themselves are not related beyond the broadest conceptual level of public good," Gaziano wrote. "In addition, they are entirely separate from the subject of a stepped rather than a flat-rate income tax, which, by itself, has been the subject of five prior initiative petitions."

The constitutional amendment, sometimes called the "millionaire's tax" or the "fair share amendment," was proposed by Raise Up Massachusetts, a coalition of labor unions, clergy and liberal organizing groups. The advocates proposed raising the tax rate and earmarking the additional money for education and transportation.

As is required for a constitutional amendment, the proposal received more than 25 percent support in the Legislature during constitutional conventions in two consecutive legislative sessions. A ballot vote would have been the final step.

Supporters of the amendment said it would have provided a more progressive tax structure, where wealthier tax filers pay their "fair share" to improve the state's schools and transportation infrastructure.

Opponents of the amendment said it would have hurt the state's economy and encourage high earners and business owners to move out of state.

A group of business-backed plaintiffs, led by the president of the Massachusetts High Technology Council, Christopher Anderson, challenged the constitutional amendment in court.

The group argued that the amendment would earmark spending on specific budget items, which is not allowed through the initiative petition process. They also said it violates state law on ballot questions by including multiple topics in one question.

"Allowing this Initiative on the ballot would undermine the Legislature's authority with respect to both spending and taxes in one fell swoop, setting the stage for public finances to be determined not in the deliberative legislative process, but in the free-for-all of special interest-fueled initiative petitions," the business groups wrote in their court brief.

Attorney General Maura Healey and Secretary of the Commonwealth William Galvin were the named defendants in the lawsuit, as the state officials responsible for putting the question on the ballot.

Healey said in a court brief that the measure was properly certified.

The requirement that a ballot question only include related subjects is meant to avoid voter confusion and eliminate the ability to tie an unpopular policy to a popular one when voters can only vote on the question in its entirety.

Budd, in her 31-page dissent, wrote that she believes the two parts of the question are mutually dependent, because separating the income tax change from the funding earmarks would fundamentally change the ballot question. "The petition does not have the same meaning if its subjects are separated," she wrote.

Budd concluded, "Prohibiting the people from voting on this petition undermines the legislative power given to the people to draft and enact laws in a manner that is incompatible with the separation of powers principle (in the Constitution)."